Wednesday, August 3, 2011

Can We Talk About Congressional Pensions For A Few Minutes

Should a House representative or senator or any government employee be allowed to get a pension - which is also paid out of taxpayer's money - after they've been "disgraced?"

For example sent to jail for drug use, or money laundering, or in the case of David Wu of Oregon, who "initiated an unwanted sexual encounter" with the teenage daughter of a campaign donor.

Here's the article from Yahoo News:
Disgraced Rep. Wu could collect nearly $900K in pension benefits
Scandal-plagued Rep. David Wu, D-Ore., will be leaving the House eligible to draw a lucrative congressional pension totaling almost $900,000.

First elected to Congress in 1998, Wu's benefits could add up over the rest of his life to an estimated $851,000 based solely on his congressional service—or $891,000 if another year of possible qualifying service as a clerk with the federal judiciary is included.

Already, the 56-year-old lawmaker qualifies for an immediate annual pension of about $23,871 if he makes good on announced plans to resign sometime shortly, according to calculations provided to National Journal by the Alexandria, Va.-based National Taxpayers Union. (He had not done so as of Wednesday afternoon). That yearly amount would go as high as $24,998, if Wu's year of service as a judge's clerk is added.

If Wu decides instead to hold off until age 62 to collect the full amount of his pension, those annual payouts would be 30 percent higher, said Peter Sepp, the Taxpayers Union's executive vice president.

"It shouldn't be this way," said Sepp, among the critics who complain that congressional retirement benefits are two to three times more generous than those offered to similarly salaried private sector employees. "Whether a lawmaker is leaving under a cloud or is on top of a cloud as an angel—congressional retirement benefits need to be brought back down to earth."

Wu had announced last week he would resign from Congress at the conclusion of the contentious battle over raising the debt ceiling. It was the final legislative hurrah for the seven-term lawmaker, who said he would step down after a damaging report that he had initiated an "unwanted sexual encounter" with the teenage daughter of a campaign donor.

But as of Wednesday afternoon, nearly 24 hours after the president signed the debt bill into law, Wu still remained in office. A spokeswoman for Oregon Gov. John Kitzhaber (D) said the governor's office has not yet received a formal resignation letter from Wu -- which is required for the governor to set a special election date -- and House Speaker John Boehner's office said they had not received official notice of Wu's departure, either.

Wu's office said it expected it won't be much longer until he announces more definitively timetable for stepping down.

Wu's standard congressional salary this year is $174,000. Members first elected after 1984 generally participate in the Federal Employees Retirement System and pay 1.3 percent of their salaries toward the benefit. They also pay into and collect Social Security.

They also have little fear that inflation will eat into their pension. The congressional retirement benefit is protected with Cost of Living Adjustments, typically projected by federal actuaries to be about 3 percent a year —- a feature that most private plans don't offer.

Most members of Congress also participate in the federal Thrift Savings Plan, a defined-contribution arrangement that works like a 401 (k) retirement plan, providing a government match of their salary contribution of up to 5 percent. Wu's potential Thrift Savings Plan balance is calculated to be as high as $213,855.

Former Rep. Anthony Weiner, D-N.Y., who left in June during his seventh term in Congress amid a scandal over his X-rated Internet indiscretions, also remains eligible to draw upon a congressional pension. The taxpayers' union has previously estimated that Weiner, 46, would draw an annual pension of $32,357 at age 56, or $46,224 of he waited until age 62 to draw on it. Weiner's potential Thrift Savings Plan balance is $216,011.

Pension amounts for individual members of Congress are not a matter of public record. But the taxpayers' union makes its projections based on other known details such as the length of federal service, current age, life expectancy based on table used by life insurance agency mortality tables, and COLA estimates.

The calculations done on Wu's potential savings in the thrift plan may be up to $213,855 are based on projections of the maximum he could have socked away. According to Sepp, the amount that any participant can contribute annually on his own (without the match) is $16,500 this year. Participants also get another 1 percent of their salary deposit from the government into their accounts, whether they put any of their own money in or not.

The taxpayers' union calculations are based on his having made the maximum contributions out of pocket, and receiving the maximum salary matches.


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